I had a SaaS vendor ask me the following question when I mentioned “average” Free Trial conversion rates:

When we look at broad Free Trial conversion ratios, I would assume some of the variances may depend on how much information is required to sign up for a free trial.

For example, there are a number of sites that require very little, if any, prospect information (i.e., just an email).

Others required name, phone, email, address, and some other information.

These are two approaches to pre-qualification.

I would expect the former will allow the casual less-than-curious person to take a peak, many of which may not be a fit for long term use.

They wouldn’t buy regardless. In the second model, these “non-prospects” would steer away and not even become a statistic in the conversion ratios.

It would be very interesting to hear you opinion and experience on the data capture sign up approaches.

– Paul

And my response to him was:

Paul, I’d say variances are more likely tied to the sources of the data.

Consider whether it makes real sense to lump together a light-weight Project Management App like 37Signals’ Basecamp, a vertical-specific vendor like RecruiterBox, and an Enterprise HCM product like Workday when looking for “average” conversion rates… or “average” anything to do with SaaS for that matter?

But you bring up something that is rarely talked about or generally glossed over: Free Trial sign-up forms, and their importance in the overall Sales Process for a SaaS or Web App vendor.

I’ll start with your point about pre-qualification.

The way I look at it, pre-qualification should start long before the sign-up process.

How you position your product, the sales copy you use, the imagery and social proof, and even what you do to engage with your prospects before they sign-up (webinars, whitepapers, etc.) will all help in the pre-qualification / self-selecting process.

I really can’t see how asking for a phone number or title on a sign-up form qualifies or disqualifies a prospects. It does add data points, but qualification based simply on the existence of that information is a stretch.

On the other hand, there is a massive body of evidence from years of testing in the e-commerce and Internet Marketing industries that indicates asking for too much information on a form will reduce the number of people that fill out the form or in this case, sign-up.

Yes, a longer Free Trial sign-up form with good marketing (sales copy, social proof, imagery, etc.) might get more people to complete it than a short one with no marketing, but what about a shorter sign-up form WITH improved marketing?

So I always ask for the bare minimum – which will vary from vendor to vendor and can be as little as just the email address – on the first sign-up form – surrounded by all of the afore mentioned marketing elements.

Then I rely on a strong Free Trial strategy backed-up by psychological factors – such as the rules of Commitment and Consistency put forth by Robert Cialdini in his book Influence: The Psychology of Persuasion – to complete the prospect profile in the post-signup & in-app engagement process.

The rule of Commitment and Consistency basically says that people are much more willing to give you information AFTER they’ve made a commitment – even if very small, like entering their email address – than up-front without any previous commitment.

But it isn’t just collecting the information from them, it is HOW you do it. It should be done in a way that allows them to provide information not so you can sell or pitch them, but instead to improve their in-app experience and help them complete the evaluation of the product in a timely and efficient manner.

But this requires a completely different approach to Free Trials than most SaaS & Web App vendors take – one that gets away from “evaluation” as the basis for the trial and moves toward Engagement.

Let’s Optimize your Free Trial Conversion Rate

For immediate consultation and advice on improving Free Trial conversion rates, schedule at least a 15-minute meeting with me via Clarity. If you feel a more involved engagement is required for me to help you, email me with the specifics of your situation (as much detail as you’re comfortable giving) and we’ll setup a meeting to work through the particulars.

When it comes to SaaS Customer Retention, I get questions like this frequently:

Hi Lincoln, I’d like to hear your perspective on minimizing churn, especially in an industry with steadily declining prices, Adding more value with a better customer experience and more product functionality to mitigate price erosion and churn helps. Better segmentation. What else?

Churn happens for many reasons, but especially when people think your product doesn’t do something they need it to do (especially if they thought it would), if it doesn’t do that thing as easy as it should, or if the experience is incongruent with the price paid.

SaaS Customer Retention: The Seeds of Churn Are Planted Early

Clearly these are just a few of the reasons for Churn… but in many ways, these are the basis for the things you might be more likely to hear or see, like Customer Service problems or post-sale price sensitivity.

So, up-front price sensitivity often results from directly comparing your product to a cheap competitor’s product… when 12 different products seem to be identical, price becomes the main differentiator and the lowest price “wins.” (Does anyone really win the race to the bottom?)

What is really interesting to me is that Increasing Retention (or Reducing Churn) and Converting Prospects into paying customers share many of the same requirements.

It starts with attracting the right crowd and managing expectations properly early in the process.

Improve SaaS Customer Retention by Adding Value Before the Sign-Up

It is easy to say “add value” so you can charge more, but what does that mean?

Where I’ve seen success in “adding value” is in what I call pre-sale or pre-signup Indoctrination.

How you position your product, the sales copy you use, the imagery and social proof, and even what you do to engage with your prospects before they sign-up (webinars, whitepapers, etc.) will all help in that Indoctrination process.

And it will help better prepare your prospects and customers for the post-signup experience, allowing them to become more Engaged – faster – thus leading to a deeper level of Investment and, of course Conversion.

So the goal of pre-sales lead nurturing / Indoctrination is to get them engaged, then get them invested in the product.

Customer Retention / Prospect Conversion are the same in that respect…

Get them and keep them engaged, then get and keep them invested in the product.

SaaS Customer Retention is a Process

So yes, a great User Experience, managing expectations, Engagement, Investment (time, energy, resources, etc.) are all part of the conversion – and the retention – process.

But the secret to both is having a plan for conversion and revenue expansion.

When someone enters your Free Trial or becomes a lead in any other way, you need to have a specific conversion path that they get on as soon as they sign-up (or hopefully before they sign-up).

Now everything you do should lead them down that path, never letting them fend for themselves or virtually wander around.

Well, the same thing should happen after they become a customer, too… you want to up-sell, move them to a more expensive version or incorporate add-ons into their current plan, etc.

To keep converting customers, expanding revenue, and growing Customer Lifetime Value (CLV) requires a clearly defined path and you should guide your customers down that path in everything you do.

And, of course, if you’re constantly moving them down that path, then you know you’re engaging them and they aren’t a churn threat.

Let’s Optimize your Free Trial Conversion Rate

There is only one of me, so I can only help a limited number of SaaS providers at any one time. But if you’re serious about finally turning your SaaS Free Trial into a customer-acquisition machine, email me with the details of your situation and I’ll get back to you to setup a meeting.